Kabra Extrustiontechnik Ltd (KET), the flagship company of the Kolsite group, specializes in providing plastic extrusion machinery for manufacturing pipes and films. It is one of the largest players in this space and present across 85+ countries in the Americas, Middle East, Asia and Africa. It has two manufacturing locations in Daman. It has completed more than 14,000 installations worldwide since 1962.

KET enjoys a leadership position in the extrusion market and is a ‘Two Star Export House’ status. It has set benchmarks in the plastics extrusion industry for its modern R&D techniques and processes to meet the market requirements for low power consumption, high output, maintenance-free and user-friendly plastic extrusion plants. It received two consecutive National Awards for Technology Innovation in 2015 and 2016. Through constant R&D and innovation, it has pioneered over 57 products and solutions in the plastic extrusion industry since 1970.

Collaborations: KET has collaborations with leading companies in the plastic industry such as Battenfeld-Cincinnati (Germany-Austria-USA), PentaS.r.l. (Italy), Greiner (Austria), Unicor (Germany) and ExtronMecanor (Finland).

KET offers market solutions to the following:

Agriculture (Plasticulture): Plasticulture represents application of plastics in Agriculture, Horticulture, Water management and related areas. A variety of plastic materials and end-products are deployed in Plasticulture applications for water conservation, irrigation efficiency, crop and environment protection as well as end-product storage and transportation.

Infrastructure: Plastics pipes and profiles play a major role in the fields of Housing, Industrial and Public Infrastructure, Sanitation, Water Reticulation, Irrigation, Desalination and Effluent Treatment, Micro-ducts (Fibre optics) and conduits.

Packaging: Flexible packaging offers solutions for diverse applications in various user sectors including staples and food products, beverages, pharmaceuticals, personal care and household products, cigarettes and tobacco products as well as a wide range of industrial applications.

Telecom: In telecommunications, the ducts in which the fibre optic cables are installed are usually made of polyethylene. KET manufactures high-speed telecom micro-duct lines and high performance bundled sheathing lines to produce micro-duct for 3G and 4G data communication.

Valuation: KET is a closely-held, investor-friendly company that has consistently paid dividends since the last 10 years. The Indian promoters hold 56% equity stake (zero pledged) while Battenfeld Extrusion (Germany and USA) hold 14% stake. For FY17, the Company posted sales of Rs.276 crore with net profit of Rs.28 crore and an EPS of Rs.8.7. At a market cap of Rs.500 crore, the stock trades at a P/E of just 18x as against the Industry P/E of 29.76x. Its share book value is Rs.57.72. For FY18 and FY19, the Company may record a top-line and bottom-line growth of 10% and 15% respectively, notching an EPS of Rs.10 and Rs.11.5 respectively. At the CMP, the stock is available at an attractive forward P/E of just 11x thus providing an investment opportunity for long-term gains.

Still lot of oppurtunities are available in this market . One such theme is restructuring of stressed assets. My three pick which r having potential to double from current rate are : ,
1. Amtek Auto
2. Jaypee Infra
3. Monnet Ispat
Dont see daily fluctuations and buy in staggered manner at every dip.

Still lot of oppurtunities are available in this market . One such theme is restructuring of stressed assets. My three pick which r having potential to double from current rate are : ,
1. Amtek Auto
2. Jaypee Infra
3. Monnet Ispat
Dont see daily fluctuations and buy in staggered manner at every dip.

Click to expand...

Upper Circuits started for Jaypee and Amtek. Still can double from current level .

Still lot of oppurtunities are available in this market . One such theme is restructuring of stressed assets. My three pick which r having potential to double from current rate are : ,
1. Amtek Auto
2. Jaypee Infra
3. Monnet Ispat
Dont see daily fluctuations and buy in staggered manner at every dip.

Focused R&D to develop new products from time to time and expanding its R&D in collaboration with Dept. of Scientific & Industrial Research (DISR) and National Chemical Laboratory promoted by Government of India

Strong Promoter Holding of 71% as on March 2017. Promoters are having sound Entrepreneurial Skills and Chemical Engineering Background

100% FDI is allowed in Indian Chemicals sector

Low Equity base of Rs.1.1 Cr

It can Command a P/E of 40+ in the years to come (Mark my words)Cons:

Debt to Equity is approx. 2.9

Book Value is Rs.64, so it is trading at 9 times the book value (Even the competitors are trading at 5-10 times their book values)

It is trading at a P/E of 25

Trading in BSE only and Liquidity concern – 30 day average trading volume is at 3600 (Hope it will list in NSE too in the near future)

The Company : Ceejay Finance Ltd (CFL), headquartered in Nadiad, Gujarat and registered as an Asset Finance Company – D NBFC with the Reserve bank of India, is an integrated finance company providing financial services. CFL is a sister company of Ceejay Group, which has been established for over a century and has been a leading player in Retail Finance since 1993, specializing in loans for vehicle (2 Wheelers, 3 Wheelers, 4 Wheelers, Pre-owned vehicle and Commercial Vehicles). With growing business opportunities, the company diversified its finance business to include SME Business Loans, Loan Against Property (LAP), Personal Loans, Micro Finance Loans (Since 2015), and also acting as an Insurance Service provider for Genaral Insurance to the clients.

Business : The company is currently managing Assets (AUM) of over 500 Crores and has served over 1.2 million clients nationally. The company is having a strong presence in rural, semi-rural, Urban and semi-urban areas, where the company help it clients to secure loans with minimum hassle. The company has direct presence in major cities & towns in Gujarat and Maharashtra. And rest of the area is covered through agents and dealers network spread across the state of Mah & Guj. The company secure the finance from the bank at 12 to 14% and promoter entity at 10 to 12%. ICRA has assigned the company a stable rating of +BB (Stable) for the cash credit limit from the banks. Capital Adequacy Ratio (CAR) of the company stands at a healthy 60%, well above the regulatory minimu of 15%. As on 31st March 2017, the Hypothecation / Mortgage Loan stock stands at 55 Cr as compared to 42 Crore as on 31st March 2016.

Outlook : With normal monsoon in Gujarat and Maharashtra in the current year, the demand from rural and semi rural areas for the financial products is likely to increase, current data for 2 wheeler sales from rural areas is encouraging. Demand for MFI loans from 10,000 to 20,000 which the company caters to is likely to remain growth area for the company, along with Personal Loan and LAP portfolio. Falling interest rates is likely to help company secure finance at a much lower rates than currently 10 to 14%.

Valuation : CFL, a continuous dividend paying company for the last 7 years is a BSE listed company with a small equity of Rs 3.45 Cr and promoter holding of 59%, 20% non promoter holding in physical form and 5.3% held by HNI Investor, leaving very less floating stock in the market. For FY 17 the company reported an income of 14.5 Cr and Net Profit of 4.68 Cr giving an EPS of Rs 13.56, for FY 18, the company is likely to grow its topline by 15% and bottomline by 25% due to reduction in cost of fund and growth in disbursement, the expected EPS of Rs 17, the stock is trading at a PE of just 6.8 times, Current Price to book value is 1.2 times only (Industry PE & P/B stands at 37.46 & 2.5 to 4 times. Muthoot Capital Ltd., is in the same business and its valued at 24 P/E and Price to Book of 4 times.), ROE & ROCE is 13.29% & 21.94%, Debt to Equity Ratio is 0.60 only.

In the last 10 years, the company has achieved Compounded Sales Growth of 8.48% and Compounded Profit Growth of 13.5%, Trailing Twelve month Sales Growth & Profit Growth is 18% and 28%, which indicates the company is on a high growth trajectory. If the company is valued even at 50% discount to its peers in terms of P/E and Price to Book value, stock price should easily more than double from current levels, thus making CFL a investment candidate for long term wealth creation.

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